While a standard deduction of Rs 40,000 across the board to salaried individuals is a welcome move, the benefit is somewhat negated by the increase in cess rate. Health and education cess is now at 4% on income tax.
As shown by our analysis below, these changes are going to bring little cheer to salaried individuals earning less than 10 lakh in a year, but for people earning a salary of more than 10 lakh annually, it is going to increase their tax outgo.
We summarise the impact of the cess hike for different tax slabs in the following table. Take a glance to get the complete picture: